The global software as a service (SaaS) market is highly fragmented, characterized by the presence of a vastly large number of players of all sizes, notes Transparency Market Research (TMR). The top vendors of the SaaS market are Salesforce.com inc., Oracle Corporation, and ADP, LLC. The intense rivalry amongst these cloud computing majors is increasingly shaping the competitive landscape of the market. Fueled by robust business models, these leading players have been offering a dynamic mix of products and services in order to stay ahead of the pack. In the coming years, it is imperative for these companies to increasingly focus on cloud computing offerings to consolidate their shares.

Some of the other prominent players in the SaaS market are Symantec, Workday Inc., Google Inc., IBM, SAP SE, Microsoft Corporation, and Amazon Web Services Inc. A number of software and service providers are focusing on competitive offerings through innovative business models. In particular, several players are preferring business outsourcing in emerging markets, in a move to explore new revenue streams. The entry of new players is expected to intensify the competition further in the coming years.

The global software as a service market (SaaS) is projected to rise at a spectacular CAGR of 27.90% from 2015 to 2022. The market stood at US$23.8 bn in 2014 and the opportunities in the market is projected to surge to US$164.3 bn by the end of the forecast period.

Based on deployment method, the market is segmented into public cloud, private cloud, and hybrid cloud. Of these, the public cloud segment leads the market and is forecast to remain so in the forthcoming years. The growth of the segment is likely to be fueled by their vast uptake of cloud-based products and services offered through this model. Regionally, the Asia Pacific market is predicted to rise at the leading CAGR of 32.10% during the forecast period and is forecast to offer abundant lucrative avenues for market players.

The rising demand for subscription-based model of purchasing software among businesses and private consumers is a key factor driving the SaaS market. The growing uptake of applications that are hosted remotely by a software or service provider on the cloud among enterprises is boosting the market. A substantial number of enterprises in various developing and developed economies have shifted away from on-premises infrastructure and IT applications to gain agility and save large upfront cost. This is a key factor bolstering the demand for SaaS. The increasing use of social media tools across enterprises has also accentuated the market in recent years.

The soaring popularity of pay-as-you-go model of service delivery is catalyzing the market growth. With the adoption of SaaS model, an increasing number of end users are gaining the twin benefits of universal accessibility of software and services and the remarkable flexibility in pricing. In addition, the notable benefit of scalability associated the SaaS has boosted their demand across enterprises. The implementation of SaaS method of delivery has helped several small and medium enterprises/businesses (SMEs/SMBs) reap competitive benefits of accessing expensive and high-functionality software. This is vastly propelling the demand for SaaS in various regions. The benefits of automatic updates and low cost of maintenance is further fueling the uptake among small subscribers.

The mounting concern of security and privacy of enterprise data hosted on the cloud is a key factor likely to impede the growth of the SaaS market. In addition, a number of countries in developed regions have notable concerns about the location where the data is housed; this is also hindering the adoption of SaaS to an extent. Be that as it may, in recent years, the adoption of robust encryption methods has upped the security of data hosted on the cloud. In addition, the paradigmatic shift of several enterprises preferring cloud-based over on-premise IT applications is also fueling the adoption of SaaS. Furthermore, the vast popularity of implementing CRM on cloud for a growing number of businesses is expected to open lucrative avenues for market players.

The advent of disruptive pricing models and the rising demand for next-generation SaaS, such as containers-as-a-service (CaaS), to gain additional flexibility and improved functionalities are prominent trends expected to open up exciting opportunities for SaaS vendors and developers.